ND co-op eyes 1.4-GW gas plant amid soaring demand from cryptocurrency mining

Basin Electric Power Cooperative plans to build a 1.4-GW gas-fired power plant in North Dakota, its largest project yet, CEO Todd Brickhouse told an industry conference May 15.

While still in the early stages, talks about the project come as the co-op and some of its members face growing demand from North Dakota's bitcoin mining industry, which has strained the region's energy resources over the past year.

At the same time, Basin Electric, like other US power providers, must weigh potential future costs associated with recent federal regulations for fossil fuel-fired generation, which now loom over large capital investments.

Basin Electric, headquartered in Bismarck, ND, provides generation and transmission service to 140 member distribution cooperatives in nine states. In an email, a Basin Electric official would not rule out a future carbon capture retrofit to meet requirements under the US Environmental Protection Agency's new power plant rule, should it build the plant. Under those regulations, new natural gas-fired power plants that operate more than 40% of the time must curtail 90% of their greenhouse gas emissions by 2032.

"Ultimately, the technology for the build-out will be based on the regulatory conditions at that time, as well as the needs and impacts to our membership," Andy Buntrock, Basin Electric's vice president of strategic planning and communications, wrote in an email. "When designing facilities, Basin Electric has a standard practice of attempting to build structures with flexibility to add new technologies that may be required in the future."

The exact capacity of the plant is uncertain because plans are at an early stage, Buntrock added.

The National Rural Electric Cooperative Association, the trade group for nearly 900 electric cooperatives nationwide, is among organizations and states that have sued the EPA since the agency issued its new emissions rule for power plants in April.

The EPA mandates are a "threat to the affordable and reliable electric generation that Basin Electric guarantees its members and that they continue to invest in," Buntrock wrote.

Basin Electric is already building a new $800 million, 583-MW natural gas-fired plant, an addition to its Pioneer Generating Station, near a major bitcoin facility outside Williston, ND, that is expected to begin operating in 2025. The company behind the mining operation, Atlas Power LLC, plans to invest $1.9 billion in its North Dakota operations.

At a January 2023 hearing before the North Dakota Public Service Commission, the former general manager of Mountrail-Williams Electric Cooperative, which serves two counties in northwestern North Dakota, where Atlas Power is located, said the bitcoin miner had agreements to receive 600 MW in the next four years.

Transmission constraints

Basin Electric has been talking about adding gas-fired capacity in the region for some time, but the main driver behind the new plan to add as much as 1.4 GW is the bitcoin mining facility, Scott Skokus, executive director of the Dakota Resource Council, said in an interview.

"Our governor incentivized Atlas Power to come in, and everyone was so pumped up about this, and now it's just turned into a big fight," Skokus said.

The sudden demand for large loads of electricity and increasingly tight supplies in January prompted MDU Resources Group Inc. subsidiary Montana-Dakota Utilities Co. to file a complaint (EL24-85) with the Federal Energy Commission over congestion charges.

The Atlas Power datacenter near Williston in northwestern North Dakota has been increasing demand on Basin Electric's natural gas-fired turbines and stressing the transmission system, according to the complaint. The company alleged that the Midcontinent ISO and Southwest Power Pool overcharged the company $18 million in duplicative transmission charges.

Montana-Dakota's electric load comes from a portion of the SPP system capable of importing 1 GW of electricity during peak demand hours. But in January, demand peaked at 1.7 GW, adding to the transmission constraint, the utility's complaint said.

"The cumulative impact of the additional load from Atlas, increased gas turbine unavailability, and periods of reduced output from local wind farms resulted in a pre-contingent overload" of the local network, prompting "a spike in market congestion costs from both SPP and MISO," according to the FERC complaint. The case is pending at FERC.

A North Dakota district court is also considering a decision in a civil lawsuit filed by 22 residents in Williston County who sued Atlas Power over noise from the bitcoin mining center and the county for failing to address it.

'Redundant power supply'

Over the last couple of years, cryptocurrency miners have been flocking to North Dakota, attracted by the state's cold climate and tax breaks for oil producers that sell inexpensive gas to power their datacenters.

North Dakota Gov. Doug Burgum (R) said when announcing the Atlas bitcoin operation in January 2022 that it would become one of the world's largest when fully constructed. He also touted what he called the state's "reliable, affordable and redundant power supply" as attractive to datacenter and cryptocurrency developers.

If Basin Electric moves forward with the 1 GW-plus power plant and runs it on natural gas retrieved from nearby oilfields, it could lead to less flaring and thus bring some environmental benefits, Skokus said.

The practice of burning off unused gas at the wellhead accounted for 12% of North Dakota's greenhouse gas emissions in 2019, according to the state's latest inventory of climate-warming gases. When flares are unlit or malfunction, the natural gas is released as methane, which is more than 80% more potent of a greenhouse gas than carbon dioxide in the short term.